Rumors have been flying for some time that Amazon is poised to enter the pharmacy business. It looks like CVS is fighting back by getting ahead of Amazon, offering next day delivery for drugs. The plan is to have nationwide coverage by early next year. By December 4 of this year, CVS says it will even offer same-day delivery of drugs in Manhattan. Sharon Terlep reports:
The same-day service in Manhattan will be handled by couriers, and roughly 50 nonprescription goods will also be eligible for delivery as well.
As the pharmacy industry shifts, CVS revenues have declined in its retail locations. On Monday, it reported that retail sales, including prescriptions, fell 2.7% to roughly 42% of overall revenue in the period ended Sept. 30 while revenue in its pharmacy benefit manager, or PBM, operations jumped 8.1% in the quarter.
Meanwhile, Amazon is considering entering the pharmacy business, which is a factor in CVS’s decision to pursue a $66 billion bid for insurer Aetna Inc.
CVS executives, in discussing quarterly earnings results on Monday, didn’t address talks with Aetna, reported last month by The Wall Street Journal.
Asked how much delivery would cost, Helena Foulkes, who runs the company’s retail business, didn’t specify but said CVS was able to “use our scale to secure a low-cost, competitive option” that the company believes customers will pay for.
Read more here.